Chart of the Week: China demand for copper falls amidst record rally
Elevated copper prices raise valuation questions.
This week’s insights come directly from Jon Mills & Alex Anderson in the Mining 2026 Q2 Industry Pulse.
Copper price booms
Despite a recent softening in prices, most major mined commodity prices are elevated compared with the past and the cost curve, a key driver of the general overvaluation we see. Copper reached new highs before modestly retreating to end up about 10% on last quarter. While China demand is subdued, optimism over AI and energy transition demand along with US tariff-related trade distortions and near term supply issues at various mines support the price.
Yet China copper imports falling
Copper is up 10% on last quarter to around USD 6.50 per pound, near historical highs and significantly above cost support. Yet China demand—more than half the global total—is subdued and the refined copper market is still in surplus. Warehouse stocks are down with seasonally higher demand in China, but are historically elevated.
The price is supported by near-term mine supply issues along with financial flows and optimism for the energy transition and artificial intelligence-driven demand. Traders are also moving copper to the US in advance of potentially higher tariffs, creating a shortage elsewhere.
We expect China’s demand to moderate as it moves to a more consumption-focused economy, offsetting rising demand from other sources. Mined supply is set to increase longer-term, aided by new technologies, with recycled/scrap supply also likely to rise. We assume a midcycle price of USD 3.80 per pound from 2030 based on the long-run marginal cost of production.
For investors, this raises questions surrounding the valuations of copper miners - a topic I explored in this recent article dissecting BHP and its recent earnings result.
